FINANCING

Small Business Loans

Small Business Loans

Small businesses are the heart and soul of our nation’s and state’s economy. They comprise 99.9% of all businesses across the nation and 98.9% percent of all businesses in Rhode Island.

Unfortunately, small businesses often find themselves constrained by the balance sheets or liquidity requirements of traditional bank lending parameters.

At CommerceRI, we know a small business’s success can result in rapid growth and financing needs that may exceed the leverage ratios of traditional banks. Our Small Business Loan Fund (SBLF) helps level the playing field and aims to fill the gap in financing that small and mid-sized businesses face.

If your small business needs a direct, fully secured loan, the SBLF provides up to $500,000 for working capital to existing manufacturing, processing, and selected service businesses. Additionally, manufacturers seeking to finance the acquisition of land, buildings, and equipment may qualify for loans in excess of $500,000. Interest rates are fixed, repayment terms are flexible, and there’s an expectation that at least one job will be created for each $50,000 you borrow.

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Small Business Assistance Program

This program helps entrepreneurs and small businesses that are having difficulty obtaining adequate credit from traditional lending organizations. The program focuses on women- and minority-owned enterprises, as well as those in Rhode Island’s underserved communities. The program partners with the following organizations to provide direct loans to businesses.

Partners for direct loans at or above $25,000:

Business Development Company of Rhode Island: Peter Dorsey, 401-351-3036

The program encourages banks and credit unions to make slightly riskier loans by providing matching funds from the state to create cash collateral accounts. Rhode Island Capital Corporation, which administers the program, also offers a full suite of business lines of credit, SBA loans, term loans, and mezzanine investment from $50,000 to $5 million.

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Mortgage Insurance

Mortgage Insurance

The Rhode Island Industrial Recreational Building Authority (IRBA) provides mortgage insurance to ease the down payment burden when your company invests in real estate, machinery, equipment, or tourist/travel recreation projects.

The maximum amount that can be insured through this program is $5,000,000, covering up to 90% on real estate, 80% on machinery and equipment, and 75% on tourist/travel recreation projects. This program offers borrowers debt insurance on tax-free bonds, taxable bonds, and conventional mortgages.

CommerceRI staff can walk you through eligibility criteria, from dollar limits per project to approved use of funds and forms of financing.

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Tax-Exempt Bonds

Tax-Exempt Bonds

RIIFC issues tax-exempt private activity bonds for companies to finance manufacturing projects with a $10,000,000 maximum limit per project. The bond can finance up to 100% of the cost for a manufacturing project including land, new machinery and equipment, building costs, and certain eligible “soft” costs. Interest rates are determined by the market.

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Taxable Bonds

Taxable Bonds

RIIFC issues taxable bonds for businesses that are expanding and require a long-term financing solution. These bonds are almost identical to the tax-exempt bonds, but they are taxable for financing fixed commercial assets such as land, building, machinery and equipment, and related “soft” costs. The limit per project is established by the bond purchaser or credit enhancer.

If you’re considering bond financing, we at CommerceRI can help you understand the wealth of relevant information. Contact our Finance team to discuss eligibility, project requirements, and other details.